EU AI Act: Prohibited Practices Now Enforceable

The EU AI Act’s Article 5 provisions — banning social scoring, untargeted facial recognition scraping, and emotion inference in workplaces and schools — have been enforceable since February 2, 2025. EU member states are now establishing national AI enforcement bodies ahead of the August 2, 2026 deadline for high-risk system obligations.

Penalties for prohibited-practice violations can reach up to 7% of global annual turnover or EUR 35 million, whichever is higher. Other violations carry penalties of up to 3% / EUR 15 million, and providing misleading information to authorities up to 1% / EUR 7.5 million.

What to do: Review all AI applications for prohibited uses under Article 5. Begin preparing compliance documentation for high-risk systems ahead of August 2026.

US Federal AI Policy Under Trump Administration

With Biden’s Executive Order 14110 rescinded on January 20, 2025, and replaced by Executive Order 14179 (“Removing Barriers to American Leadership in Artificial Intelligence”), the federal AI policy landscape has shifted:

  • Biden-era OMB procurement requirements (M-24-18) have been superseded
  • The AI Safety Institute at NIST was gutted through staff cuts and rebranded as CAISI
  • Federal agencies have been directed to reduce AI regulatory burdens
  • A December 2025 executive order created a DOJ task force to challenge state AI laws

Impact: Companies relying on Biden-era federal guidance should review current requirements.

State-Level Advances

California SB 1047: This frontier AI safety bill passed both chambers of the California legislature in 2024 but was vetoed by Governor Newsom on September 29, 2024. New California AI bills are being introduced in the 2025-2026 session. Related bills that did pass include AB 2655 (election deepfakes) and SB 926 (AI-generated nonconsensual intimate images).

New York: Multiple AI-related employment bills are advancing, including proposals addressing AI in hiring and promotion decisions and the RAISE Act regulating frontier AI models.

Compliance Cost Landscape

Industry surveys indicate significant compliance costs for the EU AI Act, particularly for SMEs. A European Digital SME Alliance survey found over 60% of small and medium-sized tech companies report being unprepared for compliance.

Recommendation: Begin compliance planning now, especially for high-risk AI systems ahead of the August 2, 2026 deadline.

Key upcoming dates: Colorado SB 24-205 implementation (June 30, 2026), EU AI Act high-risk obligations (August 2, 2026)